Topline
The share price of a special purpose acquisition company that plans to fund a new social media network headed by former President Donald Trump more than doubled Friday, closing 107% higher at $94.20, after climbing as high as $157.50 in early morning trading.
Then-President Donald Trump speaks during a cabinet meeting at the White House on October 21, 2019 ... [+]
Key Facts
Trading of the stock was halted several times on Friday due to volatility, just as it was on Thursday.
In a news release Wednesday night, a company called the Trump Media and Technology Group said it planned to merge with the SPAC to create a new, publicly listed social media company called "TRUTH Social," with Trump serving as chairman.
Prior to the announcement, Digital World Acquisition largely traded just below its par value of $10.
What To Watch For
TRUTH Social bills itself as a “rival to the liberal media consortium,” with Trump saying he plans to use the network to regain his presence on social media. “Your favorite American President has been silenced,” Trump said in a statement, referring to his ban from every major social media platform after his supporters stormed the U.S. Capitol on January 6. The Trump Media and Technology Group also announced plans to launch a streaming service featuring “non-woke” programming. The social network plans a beta launch next month ahead of a full rollout in early 2022.
Key Background
SPACs, which have become increasingly popular over the past few years, go public to raise funds from investors to buy an existing company. That’s led to SPACs often being referred to as blank-check companies. In the case of Digital World Acquisition, it was formed last year and announced an initial public offering earlier this year with a plan to merge with “middle-market emerging growth technology-focused companies.” If Digital World Acquisition shareholders approve the deal, this will be Trump’s second go-round with running a public company. In 1995, he took Trump Hotels and Casino Resorts public by listing it on the New York Stock Exchange, with investors buying more than $140 million of stock. By 2004, the company had declared bankruptcy, after Trump largely used it to enrich himself and relieve his personal debt burden.
Further Reading
Trump Plans To Launch New Social Network 'TRUTH Social' Next Year (Forbes)
Shares Of SPAC Behind Trump Social Media Company Jump 400% (Forbes)
Trump Had A Public Company Before. It Was A Disaster (Forbes)
